If you’ve acquired more debt than you can reasonably pay off, it’s best to take action sooner rather than later. Letting the debt—and interest—accumulate while you miss monthly payments will only hurt your credit. Thankfully, there are several viable debt relief strategies. A seasoned bankruptcy lawyer can evaluate your situation to determine which approach may be best. In the meantime, here are some of the most popular debt relief options.

3 Possible Solutions for Debt Relief

1. Debt Consolidation

Debt consolidation is ideal if you have the income to pay your debts, but you struggle to make multiple payments to multiple creditors every month. This approach essentially rolls all your individual debts into a single obligation, so you only have to make one payment every month. And, if you qualify, the new loan will have a much better interest rate than all the old debts, thereby saving you thousands.

2. Debt Settlement

When you settle debts, you agree to make a single lump-sum payment—typically a fraction of what you owe—in exchange for the lender wiping out your debt. While this may seem ideal, it’s not without drawbacks. For example, settled debts will hurt your credit score and remain on your report for seven years. As such, it may be hard to secure financing for reasonable rates after settling any debts until you rebuild your credit.

3. Bankruptcy

Bankruptcy can essentially provide a clean slate. To see if you qualify for Chapter 7 or Chapter 13, consult a bankruptcy lawyer. Chapter 7 is for individuals with little to no disposable income. After liquidating nonexempt assets to pay back creditors, applicable debts are discharged. Chapter 13, on the other hand, is similar to debt consolidation; however, any remaining debts will be wiped out after completing a three- to five-year repayment plan.

To discuss your financial situation with a knowledgeable bankruptcy lawyer, turn to Sippel Law Firm PLLC in Kingman, AZ. For over 35 years, this firm has been counseling clients in debt relief, estate planning, probate, and real estate. Led by attorney Mark Sippel, a compassionate professional who never judges clients for their decisions, their friendly team provides personalized and attentive guidance. When you’re ready to meet with a bankruptcy lawyer, reach out on their website or call (928) 753-2889.